Can you give your home back to bank?

julius128

Just a query arose from a friend.

He bought a house few years ago (at the boom year) with high price and now the value of house is much lower that he owed to the bank.

He is now immigrating to other country and obviously if he sell the house he still owe over 50k to the bank which he simply cant afford to pay.

Can he simply ask bank to take ownership of the house or what it would be the procedure if you know?

He never been in arrears at all and only reason for this, is immigrating forever to other country.

Please help if you know the legal case!
Thanks

ntlbell

The short answer is no.

AARRRGH

I'm not a solicitor, but if your friend does a runner the bank will start court proceedings, your friend won't show up, and the judge will then issue a judgement against your friend.

50k is a lot of money. The bank may track your friend down. This won't be difficult. I could probably track him down if you give me his name.

However, he might get away with it, but he'll be on the run forever.

irlrobins

Could he not rent out in the meantime and wait for the market to improve before selling? As long as he can cover mortgage he'll be ok.

ntlbell

AARRRGH wrote: »

I'm not a solicitor, but if your friend does a runner the bank will start court proceedings, your friend won't show up, and the judge will then issue a judgement against your friend.

50k is a lot of money. The bank may track your friend down. This won't be difficult. I could probably track him down if you give me his name.

However, he might get away with it, but he'll be on the run forever.

Just to add to this, that 50K could turn into a much larger number depending on what the bank finally gets for the house.

jdivision

what ntl said because he'd be liable for all the legal costs, additional interest etc too

Pete4779

julius128 wrote: »

Just a query arose from a friend.

He bought a house few years ago (at the boom year) with high price and now the value of house is much lower that he owed to the bank.

He is now immigrating to other country and obviously if he sell the house he still owe over 50k to the bank which he simply cant afford to pay.

Can he simply ask bank to take ownership of the house or what it would be the procedure if you know?

He never been in arrears at all and only reason for this, is immigrating forever to other country.

Please help if you know the legal case!
Thanks

No. The bank never owned the house so you can't "give it back". He purchased an amount of money from the bank, and regardless of what he intends to do, he has to by law pay that money back under the contract he agreed.

As the bank have to approve of a house sale as they retain an interest in it (as security), it's unlikely they will simply allow a conversion of a mortgage debt to anything but a new and very large personal loan, as the mortgage debt is secured on the house which he wants to sell.

His best option is to get the lowest possible mortgage payment, longer term, etc., and rent it out. There is no legal bankruptcy provision for individuals in Ireland AFAIK.

silverharp

lets assume the guy in the example heds off to Oz? what can the lender do? what exactly are the consequences? either in theory or in practice?

Ste.phen

In theory and in practice, he has 12 years (i think) before he can come back without being chased for the debt, and he'd have to stay outside the EU or he'd get a European Payment Order served on him, which (I'm open to correction on this) is enforceable anywhere in the EU

dny123456

In theory they could... but practically, there are going to be so many people defaulting and doing exactly as you describe, that they won't be able to do anything about it.

Everyone left here, will pick up the tab; other homeowners, renters, investors, social welfare recipients, pensioners, students... you name it. The irony of it is the people who didn't buy anything, and are now feeling smug/satisfied, are going to be paying for a long long time for this mess, just like everyone else. The only way out, is that which the OP has described.

Moonbeam

No, but I think where you might be getting it from is Jingle Mail in the U.S

Ste.phen

Moonbeam wrote: »

No, but I think where you might be getting it from is Jingle Mail in the U.S

A lot of people here, on askaboutmoney, and thepropertypin seem to be under that impression.
I'm sure we have people in courts here trying to plead the fifth as well

jobless

irlrobins wrote: »

Could he not rent out in the meantime and wait for the market to improve before selling? As long as he can cover mortgage he'll be ok.

He'll be waiting a long time!

Pszczola

have to pay a ten thousand euros deposit on a house to an estate agent i am interested in buying is this correct and should i have solicitor before i pay anything over

bangersandmash

dny123456 wrote: »

In theory they could... but practically, there are going to be so many people defaulting and doing exactly as you describe, that they won't be able to do anything about it.

If anything I think we'll find it's the opposite. When the money was rolling in banks were reasonably content to let things slide. Now most banks are minimising the amount of new business that they're taking on, and concentrating on extricating what they can from the likes of the OP's friend. We've seen the same approach from the revenue. In the last year they've suddenly begun to adopt a ruthless attitude to tax evasion, with more thorough investigations into cash businesses and so on.

dny123456 wrote: »

Everyone left here, will pick up the tab; other homeowners, renters, investors, social welfare recipients, pensioners, students... you name it. The irony of it is the people who didn't buy anything, and are now feeling smug/satisfied, are going to be paying for a long long time for this mess, just like everyone else. The only way out, is that which the OP has described.

It might provide a possibility of a way out for the OP's friend. But will he take his friends, family, more distant relatives with him? Or will they all be left to shoulder the burden? I also wonder how happy other countries will be to continue to receive immigrants from Ireland when they are dealing with their own unemployment problems.

eth0_

Pszczola wrote: »

have to pay a ten thousand euros deposit on a house to an estate agent i am interested in buying is this correct and should i have solicitor before i pay anything over

Yes, of course you have to pay a deposit - how can you not know this?
And yes, you should get a solicitor to look over the contract before you hand any deposit over to the estate agent.